The Point Man for Bush's Green Push

Andy Karsner is responsible for meeting the Bush Administration's energy goals. He's hoping the private sector will help him get there

by Moira Herbst

When Energy Dept. Secretary Samuel Bodman and Assistant Secretary Alexander "Andy" Karsner first talked about plans to invest government money in something called "cellulosic" ethanol, they were enthusiastic. Most ethanol is made from corn, but cellulosic technology uses less-valuable resources, such as switchgrass or garbage. But they thought the original proposal, for $160 million, was too modest. So on Feb. 28, Bodman and Karsner unveiled plans to invest up to $385 million in cellulosic, more than double the original ante. "Ultimately, success in producing inexpensive cellulosic ethanol could be a key to eliminating our nation's addiction to oil," said Bodman.

Such an announcement could hardly be imagined several years ago. From supporting drilling for oil in the Alaska National Wildlife Refuge to disputing the science on global warming, President George W. Bush and his Administration did little to gain the confidence of environmentalists and the alternative energy industry. And while the Administration's stance on key environmental issues remains little changed, the President and his appointees at the Energy Dept. have been increasingly vocal about the need to support alternative energy.

"It is in our vital interest to diversify America's energy supply," said Bush in this year's State of the Union address, "and the way forward is through technology." He set the ambitious goal of reducing 20% of the country's projected gasoline use—mainly by replacing it with new biofuels.

Free-Market Solutions

To carry out this mission, Bush last March tapped Karsner, a former chief executive who's well credentialed in the alternative energy sector. As Assistant Secretary for Energy Efficiency & Renewable Energy, it's his job to carry out Bush's plans for clean fuels—and, in the meantime, help rehabilitate Bush's image on environmental issues. Karsner, the former CEO of energy consulting firm Enercorp, says he's all in favor of environmental stewardship, but is steering his department and budget in a staunchly promarket direction.

Karsner's job is to implement the Advanced Energy Initiative, announced by President Bush in his State of the Union address. The proposal calls for both the mandated cut in gasoline use and a 22% increase in clean-energy research to make clean energies competitive with those from fossil fuels. Karsner says his approach is "the opposite of what the legacy has been." He believes that since the 1970s the government has focused only on research and development, and needs to now shift more resources to commercialization and deployment. "It's time for a mass diffusion of new energy and technology into the American economy," he said in a Feb. 21 speech to alternative energy industry leaders and investors in New York. "Free-enterprise capitalism is the most effective route to bring clean energy into the economy."

Often decrying the slow pace of government action, Karsner says he wants to bridge the gap between the public and private sector, so that those making energy policy better understand how the market works—and how it will ultimately make clean energy an important part of the economy. "The pace of policy lags both technology and the capital markets," he says. "We need your help, and we want to be catalytic to your efforts." Karsner's background in the private sector informs his business-friendly approach to his position. A native of Dallas, he's worked in a range of energy businesses involved in everything from natural gas and coal to wind. He's managed large-scale power projects in North America, Asia, the Middle East, and North Africa.

The Assistant Secretary spends much of his time traveling to the dozens of alternative energy conferences springing up across the country, hearing the concerns of alternative energy leaders and talking with investors. Karsner says that among alternative energy companies, "predictability is the No. 1 ask." In plain English, that means companies want to know that the government is committed to renewable energy over the long term. And whenever possible, he says, he likes to give the private sector what it needs.

Backing Cellulosic to Achieve Ethanol Goals

Still, there's no question that Karsner faces serious obstacles to achieving Bush's lofty goals. It's not only that many experts are skeptical that the goals are realistic. It's also because the clock is ticking. Karsner has less than two years left in his post and he's serving under a lame-duck president.

Here's why the experts are skeptical. While Bush's 10-year goal is to produce 35 billion gallons of ethanol and alternative fuels, there's just not enough corn in the country to do that. At a Congressional hearing on Mar. 1, Guy Caruso, head of the independent analytical arm of the Energy Dept. called the Energy Information Administration, said that fuel ethanol production will fall fully 66% short of Bush's stated goal.